Sen. Bill Sample, R-Hot Springs, left, talks with Rep. John Edwards, D-Little Rock, in a meeting of the Joint Budget Committee at the Arkansas state Capitol in Little Rock, Ark., Wednesday, Nov. 12, 2014. The two legislators co-chair the committee. (AP Photo/Danny Johnston)
Arkansas Department of Human Services Director john Selig, center, speaks with agency staff members during a meeting of the Joint Budget Committee at the Arkansas state Capitol in Little Rock, Ark., Wednesday, Nov. 12, 2014. (AP Photo/Danny Johnston)
LITTLE ROCK, Arkansas — Arkansas' Medicaid program will need an additional $84.2 million in state funding next year and another $60 million from the surplus if lawmakers move forward with tax cuts approved last year, outgoing Gov. Mike Beebe recommended Wednesday.
Beebe's administration presented two separate budget recommendations on the state's Medicaid program, depending on whether the tax cuts remain in effect. Beebe, a Democrat who is leaving office in January due to term limits, has recommended delaying about $26 million worth of tax cuts that are to take effect in July.
"I have to do what I think is good policy. They can ignore it, the next governor can ignore it," Beebe, who planned to present his budget proposals to lawmakers Thursday, told reporters. "It may be a tough hurdle. That's why I didn't say repeal it. I just said delay it. But that's their call."
Beebe is recommending that the state rely more on the surplus to help the Medicaid program if the tax cuts take effect. Beebe proposes tapping $40 million in surplus funds for the fiscal year that begins July 1, 2015, and another $20 million the following year.
Without the tax cuts, Beebe recommends an additional $79 million for Medicaid next year and says $40 million from the surplus should be set aside for the program during the next two years.
Beebe's budget recommendations aren't binding, with Republican Gov.-elect Asa Hutchinson taking office in less than two months. Hutchinson ran primarily on a promise to cut individual income taxes for the middle class by $100 million.
The recommendations come as the state's compromise Medicaid expansion faces an uncertain future.
Several opponents of the "private option," which uses federal Medicaid funds to purchase private insurance for the poor, were elected in last week's midterm election. Their wins complicate efforts to gain the three-fourths support in the House and Senate to reauthorize the program, which was crafted as an alternative to the Medicaid expansion envisioned under the federal health law.
Human Services Director John Selig said the additional funds needed for Medicaid would have been even higher without the private option in effect. Selig said the program is saving the state about $90 million a year.
The primary reason for the increase in funding is a drop in the federal matching rate for the state, which is tied to the per-capita income. As incomes have risen in Arkansas, the matching funds the state receives from the federal government has dropped.
"We are the victim of our own success," Beebe told reporters.
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